When the Returns of an Option and Stock Are Perfectly

question 9

Multiple Choice

When the returns of an option and stock are perfectly correlated as in a two state binomial option model,the hedge ratio must be equal to ____________.

• A) the ratio of the range of the option outcomes to the range of the stock outcomes
• B) the ratio of the range of the stock outcomes to the range of the option outcomes
• C) the ratio of the standard deviation of the option returns to the standard deviation of the stock returns
• D) the ratio of the standard deviation of the stock returns to the standard deviation of the option returns

Distinguish between various therapeutic approaches and their intended outcomes.

Recognize the role of childhood experiences and unconscious forces in psychoanalysis.

Comprehend the concept of insight and its importance in psychoanalytic therapy.

Understand the application and efficacy of different psychotherapeutic and biomedical approaches.

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Definitions:

Par

This term typically refers to a financial instrument's nominal or face value, as opposed to its market value or price.

Negative Covenant

A clause in a contract that prohibits a borrower from taking certain actions, intended to protect the interests of the lender by maintaining the borrower's financial stability.

Current Ratio

A financial ratio indicating the capacity of a firm to cover its short-term liabilities with its current assets.

Loan Collateral

Assets a borrower offers to a lender as security for a loan, which can be seized if the loan is not repaid.